Some Meta executives could see a $1B windfall under new compensation plan

Meta recently rolled out a new pay package that would grant certain senior executives nearly $1 billion each in stock should the company reach a $9 trillion valuation by 2031.

This moonshot award promises top executives generous compensation for meeting aggressive targets, not unlike the pay packages Tesla shareholders have approved for CEO Elon Musk in recent years.

While Meta executives are unlikely to realize the value of these awards, they show how such compensation packages are becoming a key retention lever for a select group of firms pursuing aggressive AI transformation strategies.

Race for “superintelligence.” SEC filings indicate that Meta is granting stock options to six top executives, including the tech firm’s CFO, chief product officer, and chief operating officer, the Wall Street Journal reported. Some of the executives, the newspaper reported, will receive additional restricted stock units, as well. In order for the executives to receive the full award, Meta must reach a $9 trillion valuation in the next five years, up from its current $1.5 trillion market cap.

Three of the executives who are part of the incentive plan could earn a payout worth $921 million if Meta hits that $9 trillion valuation, according to an analysis by executive intelligence firm Equilar.

“This is a big bet,” a Meta spokesperson told CNBC. “These pay packages will not be realized unless Meta achieves massive future success, benefiting all of our shareholders.”

Meta plans to put $135 billion toward capital expenditures this year, up from $72 billion in 2025, as it seeks to develop AI-driven tools for its user base, Reuters reported. To achieve its AI ambitions, the company has offered multi-million dollar pay packages to recruit top talent from competing firms like OpenAI.

Given the super-sized pay packages being awarded to new hires, it makes sense that Meta would up the ante for its senior executives, Gautam Mukunda, a lecturer with the Yale School of Management, told HR Brew. “Senior people generally don’t like getting paid less than people who are not senior members of the organization, so it’s not totally shocking.”

At the same time, Meta is also laying off workers, most recently cutting about 700 roles, the New York Times reported. Promising generous compensation to senior executives while also shedding workers may have “pretty profound effects on the culture,” Mukunda predicted.

An exception, not the norm. Moonshot pay packages like the one Meta recently disclosed are still fairly rare, said Ani Huang, CEO of the Center on Executive Compensation. “They usually show up in founder-led or high-growth companies where the position of the board is that ordinary annual equity is not going to retain or focus the leader through this long, risky, strategic pivot,” she said.

In recent years, companies like Rivian, Roblox, and DoorDash have promised their CEOs $100 million dollar pay packages in exchange for meeting aggressive targets, but few have met the goals needed to reap these payouts, the Wall Street Journal reported in January. Such compensation packages may still be effective for retaining executives, even if the awards aren’t delivered, Huang said.

“Keeping a steady executive team that feels like they’re all aligned on the same goal is really important,” she said.

One notable executive not included in Meta’s new incentive compensation plan is its CEO, Mark Zuckerberg. “Excluding the CEO really shifts that story, because now nobody can argue that it’s a founder extracting value. It’s the board trying to lock in a team,” Huang said.

The fact that executives leaders won’t get paid unless the company achieves its goals may help make such moonshot packages more palatable to rank-and-file employees, according to Huang. Additionally, HR leaders can emphasize how all employees will share in the company’s success if the firm meets aggressive targets, through programs such as broad-based equity compensation.